So you walk into target needing a new winter coat, your current coat is faded and the hole in the pockets are getting too much. You find the perfect coat within 20 minutes and then you notice a handbag sale, and that new DVD you wanted is out! The next thing you know an hour has passed and you’re in line, ready to check out with arms full of ‘sale’ items. The cashier rings it up. “That’ll be $157.50.” You swipe your card, too shocked to think about what just happened. On the drive home you think about how much you just spent on things you don’t really need and know you should be saving that money instead of spending it.

Sound familiar?

If you’re like most modern working women, you know you need to save money for the future. Unfortunately there never seems to be any money left at the end of the month. Rather then constantly beating yourself up for not saving every month, learn this simple approach and then spend money guilt-free.

The old way of managing money, or possibly your current method of managing your money is to pay your bills, spend your money on fun things like going out and shopping, and then save whatever was left over.

Old method ‘save what’s left over’

Income, minus Bills, minus money spent, equals Savings.

This method of managing money is just too hard to save money at the end of the month when we live in a world of immediate gratification. Its too easy to spend money when its there. So stop making it so hard for yourself. Simply shift your mindset and follow the new approach to managing money, its the ‘Save Firs’t method.

By making clear goals about how much you want to save and treating your savings just like another bill that you must pay every month, you’ll feel better about what you have to spend, AND you’ll be adding to your savings in a much more efficient way. Now if you want to go to Target and spend $150, go for it. Its your money, you’ve already saved your savings! Don’t forget you can’t spend more than what’s left over every month, otherwise you’ll be creating debt–and we know that’s not good. Credit cards are bad, more on this later.

How much should I be saving?Naturally if you have a specific goal and target date (say you want to go overseas in 12 months for 4 weeks) you can easily find out how much money you will need to save over the given period of time so that you will have enough. You need to take your other spending needs into account when figuring out how much you want to save, think food, petrol, train tickets – the essentials that don’t come in bill form. I’ll give you more details about this in my Basics for Budgeting post coming soon.

If you don’t have a specific goal in mind but you know the importance of having savings, you should try to save 10-20% of your net income. However, if that’s too much for you, start small. Maybe start with 3% and work your way up by increasing the percentage by 1% every six months or so.

So that’s a start! If you have any tips on ways you save money each month feel free to comment below 🙂